from Europe, and also because it was found so well adapted to the cultivation of the sugar cane, which, at that time, was very profitable. Furthermore, little or no trouble was experienced with the Indians, who had become allies of the white men. By the middle of the sixteenth century this settlement was a flourishing one, and there were a half dozen or more communities south of it. The _capitancia_ system was not a success. Some of the grantees did not succeed; others grew to be arrogant. This aroused the jealousy of the Portuguese government, which began to make efforts to centralize the colony, and sent out a governor-general with plenary powers and explicit directions. A capital was built in the beautiful bay of Bahia, and the success of sugar cultivation on these shores made this settlement prosperous. Negroes were imported as slaves, and Bahia continued a great distributing point of these human chattels for centuries. By the year 1585, it was estimated by a priest, that there were twenty-five thousand white people in Brazil, twelve thousand of whom were in Bahia, and eight thousand at Pernambuco. Rio de Janeiro, at that time, had a population of less than a thousand. [Illustration: A TYPICAL BRAZILIAN STREET.] Other nations had been casting jealous eyes upon this Portuguese colony in the New World. A large colony of French Huguenots, seeking more congenial homes, settled at Rio de Janeiro, and formed friendly alliances with the Indians. This policy was exactly the opposite of the policy of the Portuguese settlers, who generally enslaved the aborigines wherever possible. It was several years before these French colonists were finally driven out of the country. In 1580 Brazil had become a Spanish possession through the uniting of the throne of Spain and Portugal. Spain, however, neglected Brazil, because it was not furnishing the golden wealth like Mexico, Peru and their other American colonies. The Dutch conquest about this time was far more formidable than all other opposition combined. The Dutch East India Company had been so successful in securing the greater part of the Portuguese possessions in the Pacific Ocean, that a West India Company was organized to do the same thing in Brazil. Although protected and subsidized by the Dutch government, this company was organized for private profit. A fleet of privateers, flying the flag of Holland, appeared at Bahia and captured that city; Pernambuco succumbed a few weeks later. Although there were a number of reverses the Dutch gradually extended their sovereignty until the whole of the northeastern part of Brazil was in their control. This Dutch sovereignty lasted for more than a quarter of a century, and it was not until Portugal had had its sovereignty restored, and several sanguinary battles were fought, that the Dutch West India Company relinquished its hold on these rich provinces.